State Politics

Wake County DA requests inquiry into SEANC's spending

Dana Cope, executive director of the State Employees Association, talks with a News & Observer editor and reporter during an interview at the newspaper Jan. 27.
Dana Cope, executive director of the State Employees Association, talks with a News & Observer editor and reporter during an interview at the newspaper Jan. 27.

Wake County District Attorney Lorrin Freeman said Monday she is asking the State Bureau of Investigation to conduct a criminal inquiry about possible financial improprieties at the State Employees Association of North Carolina.

Freeman made the remarks following an article about SEANC Executive Director Dana Cope in Sunday’s News & Observer. The article documented that SEANC had paid $109,000 in unbid work to the landscaping firm also doing work at Cope’s home.

One $19,000 check was justified by a phony invoice and made out to a defunct computer company called Perspective Concepts in Washington, D.C. The check, however, was cashed by Perspective Landscape Concepts, the firm working at Cope’s house. The article also detailed how SEANC has paid more than $8,000 for flight lessons for Cope without board notification or prior approval, and questionable spending by Cope on SEANC credit cards.

Freeman said the SBI inquiry is one step short of a criminal investigation. The SBI will review and attempt to validate information provided to Freeman.

“Regardless of how outrageous people may feel the conduct has been, the question is whether there is evidence a crime has occurred,” Freeman said. “Poor judgment and abuse of authority does not necessarily equal criminal activity.”

Freeman said the Perspective Concepts invoice merits looking at, especially because the computer company owner said he never did any work with SEANC. She noted that the SEANC board had issued a statement approving Cope’s spending.

“Clearly the board has a fiduciary responsibility themselves,” she said.

SEANC is a 55,000-member organization that advocates for state employees’ interests on issues such as pay, pensions and health care. The primary support for the organization’s $14.8 million annual budget is member dues.

The News & Observer reviewed checks, credit card statements, invoices and other records in reporting on Cope’s spending decisions at SEANC. Cope admitted in several interviews the invoice accompanying the $19,000 Perspectives Concepts check was phony but did not explain why, saying it was a personnel matter.

Cope said the $19,000 went for emergency irrigation work at the SEANC building in the spring.

There was irrigation work done at the SEANC building four months later. But that work cost $685.25 and was performed by a long-established Garner company, not the landscaping company working on Cope’s house.

The News & Observer also reported that SEANC hired the company that renovated Cope’s home in 2013 for $342,000 worth of work on the SEANC building, even though the company specializes in building and renovating private homes and has no apparent commercial experience.

Cope also put thousands of dollars of personal spending each year on SEANC credit cards. Cope has given contradictory accounts about how much of the money he has repaid but said he has paid everything he owes.

After the Sunday article went online, SEANC President Wayne Fish, a food services manager at a state prison, released a letter that fully backed Cope: “This story, which alleges that our Executive Director Dana Cope misspent funds is, quite simply, not true.”

Fish said he had appointed a committee to perform an internal investigation in early January after The News & Observer initially asked questions about SEANC spending.

“Since then, the Executive Committee has met twice to discuss the investigations’ findings,” Fish wrote. “Both times it unanimously confirmed that there was no misappropriation of funds and no financial impropriety by our organization.”

Fish did not respond to questions Monday asking who was on the committee and what documents it reviewed. The N&O also requested a copy of the investigative report and details about any errors or inaccuracies in the article.

Fish devoted much of the letter to attacking former board members Betty Jones and Art Anthony for bringing their concerns to the newspaper rather than to the SEANC board.

“I am disappointed that two of our fellow members – two people who swore to work to advocate for and protect state employees and retirees – would take these sorts of steps to try to publicly embarrass and discredit our association,” Fish wrote.

Jones, a former SEANC treasurer, said Monday that she was not attacking the board, the association or SEANC members, only an executive director she came to distrust. She said she did not have concerns about possible improprieties until near the end of her two-year term as treasurer: “I was bamboozled at first, and it took a while for me to lose my blinders.”

A Medicaid analyst and 27-year state employee, Jones said she had no faith in the internal investigation that Fish initiated.

“If the members don’t believe me, then hire an outside auditing firm to do a thorough investigation,” Jones said. “If I’m wrong, you’ll never hear from me again.”

Jones initially clashed with Cope over a SEANC program in which members buy consumer electronics by paycheck deduction at prices that she said were too high. Freeman, the district attorney, also criticized the program in her previous post, Wake County clerk of court.

A call for investigation came Monday from Sen. Ralph Hise, a Burnsville Republican who drew Cope’s ire in recent years for supporting a bill that would end the ability of state employees to pay SEANC dues by automatic payroll deduction. The measure would affect teachers as well. Hise reintroduced the bill this year. Last year, Cope directed SEANC’s political action committee to spend $200,000 to defeat Hise in his Republican primary.

Hise said he was concerned by the facts reported in the newspaper.

“These are serious improprieties that need to be investigated,” he said. “State employees pay dues for a cause, because they think the organization is helping them and defending them.”

Hise made a pointed reference to one of the personal expenses Cope incurred on a SEANC credit card.

“I would be hard pressed to see how eyebrow waxing helps state employees.”

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